AR7 could be a ‘win-win-win’ for market

The AR7 CfD auction represents could deliver a ‘win-win-win’ for policymakers, developers, and suppliers, according to a report.

Wood Mackenzie said that “strategic recalibrations” of the latest round compared to previous auctions could deliver stability to the offshore wind market amid an intense political and economic battleground over net zero targets and public spending.

The report said the changes announced for AR7, including an extension to contracts to 20 years, aim to procure more offshore wind GWs at a lower strike price.

The winners of the round will be decided by intense strategic pressures, not a simple cost-based merit order, according to the report.

“The bidding process is complex and high-stakes, compounded by a smaller pot with the unknown likelihood of top-ups. The results deliver more than just a single clearing price; it's an opportunity to deliver distinct, positive outcomes for developers, the supply chain, and the UK's energy transition,” said Finlay Clark, Principal Analyst, Power and Renewables for Wood Mackenzie.